Agriculture Leaders Say Tax Bills Unacceptable as Proposed

More Must Be Done to Address Property Taxes

LINCOLN, NEB. – Two high profile bills scheduled for debate by Nebraska lawmakers don’t do enough to provide meaningful property tax reform and relief according to leaders of Nebraska agriculture organizations. The agriculture leaders, representing tens of thousands of Nebraska farmers, ranchers, and livestock feeders, say the tax related provisions included in LB 640 and LB 461 fall short of the expectations of Nebraska property taxpayers.

“We like where Senator Groene is coming from in LB 640. The concept of limiting the amount of property taxes that can be used to fund schools makes a lot of sense and we want to keep pressing that point. Unfortunately, the bill is paid for using the Property Tax Credit Fund – dollars already being used to deliver property tax relief. In that regard, LB 640 is little more than status quo for property taxpayers in terms of additional relief,” said Dennis Fujan, President of the Nebraska Soybean Association. “The Legislature must add new and alternative sources of revenue to underwrite additional property tax savings for LB 640 and deliver meaningful property tax reform for Nebraskans. Repurposing money from the Property Tax Credit Fund, without a significant reduction in the cap on property taxes, isn’t the answer.”

The agriculture leaders’ concerns about lack of action on property taxes extends to LB 461. The bill has been promoted as providing tax savings for both income and property taxpayers in the state. The agriculture leaders say tax savings proposed in the legislation are far out of balance when it comes to addressing property taxes. The bill is projected to provide more than $400 million in individual and corporate income tax relief, while only around $45 million is expected to be returned in property tax relief through the TEEOSA formula (state aid to schools).

“A ten to one ratio of income tax reductions to property tax reductions is not what Nebraskans have asked for, nor is that the message our group and others have delivered to the Capitol. The current version of LB 461 completely misses the mark. LB 461 is in no way acceptable in its current form,” said Fujan.

The agriculture leaders adopted a series of principles prior to the legislative session outlining parameters in how the group would evaluate legislative proposals related to property taxes and tax reform. The group testified before the Legislature’s Revenue, Education and Appropriations Committees offering support for numerous bills that would provide the means for the Legislature to deliver property tax reform and relief this session.

“We’ve talked to senators about the importance of balancing the tax burden between property, state sales, and state income taxes to reduce our overreliance on property taxes. We’ve pointed out the need for revenue neutral solutions that expand the tax base and use those revenues to provide dollar for dollar reductions in property taxes. We’ve shared the need for property tax reforms that benefit all property owners, and we’ve talked about ways to lessen the reliance on property taxes without harming our schools,” said Fujan. “Based on our evaluations, LB 640 and LB 461 fail to meet many of the principles we’ve outlined as a group. By potentially forcing more burden onto property taxpayers down the road, LB 461 is actually a step backward.”

Fujan said the group and their organizations will continue to work with members of the Legislature to try and improve the bills so they deliver for property taxpayers.

“We want to make these bills better, but there’s a lot of work that must be done to make them acceptable,” said Fujan.

LB 640, introduced by Sen. Mike Groene, of North Platte, is slated for legislative debate Tuesday, April 18.

LB 461 was advanced by the Legislature’s Revenue Committee and contains several tax related provisions including pieces of Governor Pete Ricketts’ tax reform package. The bill is slated for debate Friday, April. 21.